Commentary

Thursday, October 18, 2018

Distributed Ledger Tech Can Process U.S. Stock Volumes, says DTCC

Accenture cloud model scales to 100 million trades daily in study prototype


Author: Ed Blount

On October 16, 2018, the Depository Trust & Clearing Corporation (DTCC) reported that “distributed ledger technology (DLT) is capable of supporting average daily trading volumes in the US equity market of more than 100 million trades per day.” Based on a cooperative study by Accenture, Digital Asset and R3, the clearing and settlement service provider said that DLT can process daily trading volume at peak rates of 6,300 trades per second for five continuous hours. Past benchmarks were based on cryptocurrency blockchains that now operate at fewer than 100 trades per second.

DTCC commissioned the benchmark study to analyze DLT’s ability to cope with the trading volumes of the US equities market. With DTCC’s specifications, Accenture built a functional prototype of the trade settlement system on the DLT platforms of Digital Asset and R3 Corda.

“This project answered key questions and built serious confidence in blockchain’s ability to drive large scale transformation,” said David Treat, Managing Director, Global Blockchain Lead, Accenture. “The close collaboration with the DTCC and our alliance partners, Digital Asset and R3, enables us to push DLT performance to new levels against real world requirements and conditions.”

Accenture’s shared ledger model ran with 170 nodes over 19 weeks, simulating DTCC’s network of exchanges and market participants. After capturing trades from the exchange nodes, DTCC was positioned as the central counterparty to maintain privacy in the shared ledger. The simulated trades were then netted and settled, using a test environment created in the cloud.

More information about the DTCC study is available here.

 

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Journal Commentaries

 

Keep Regulation Functional (October 2008)

CSFME’s Executive Director Ed Blount interviews SEC Chairman Chris Cox.
American Banking Association Banking Journal
https://www.questia.com/library/journal/1G1-187494664/keep-functional-regulation-how-financial-regulation

 

The Bear Market Posse, or Counterparty Risk Management during the Recent Turmoil (Sept.  2008)

by Ed Blount
The RMA Journal, v91n1, 28-32, 5 pages Sep 2008.

 

Searching for New Paradigms at BIS (July 2008)

by Ed Blount
Unexpected deficiencies in bank capital after recent market turmoil has regulators rethinking aspects of Basel II and “value at risk.”  
American Banking Association Banking Journal  
https://www.questia.com/library/journal/1G1-181991450/searching-for-new-paradigms-at-bis-market-turmoil

 

Will Basel II Affect The Competitive Landscape? (September 2003)

By Ed Blount
Newly elected Basel Committee Chairman Caruana, Governor of the Bank of Spain, gives his views on the revised Basel capital accord, relative to its potential effects on competition and risk management in banking markets.
American Banking Association Banking Journal
https://www.questia.com/read/1G1-108008773/will-basel-ii-affect-the-competitive-landscape-the​